Maximum production of initial products in the US and American oil export growth undermine OPEC efforts to stabilize global oil market and oil prices growth.
The cost of “Brent” March 2018 oil was $67.09 (-0/24%) on February 25 at 8:54 Kyiv time. The barrel of April oil “WTI” was trading at $57.19 (-0.12%). Previous benchmarking ended at $67.25 and $57.26, respectively.
The fall in prices was due to large oil supplies amid growing exports from America. This process has forced other producers, especially in the Middle East, to sell their oil at a discount.
The official selling price (OSP) for Abu Dhabi's flagship crude oil “Murban” has been declining for four consecutive months under the pressure of a sharp increase in the US exports. This is the longest discount period in almost two years. The oil purchased for shipment in the first four months of 2019 were sold with discounts from $0.05 to $0.40 per barrel.
Crude oil production in the United States at the end of last week amounted to 12 million b/d. At the same time, the export of raw materials for the first time reached 3.6 million b/d.
The growth of oil production in the United States reduces the desire initiated by OPEC to reduce production in order to squeeze the market and support the price of oil. Nevertheless, the reduction in the supply of OPEC, as well as the US sanctions against oil exports from Iran and Venezuela, led to an increase in world prices last week to 2019 highs.
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